Positioning Services in Competitive Markets

Basic Focus Strategies for Services

BREADTH OF SERVICE OFFERINGS

Narrow
Many
NUMBER OF MARKETS SERVED
Service Focused

Wide
Unfocused (Everything for everyone)

Few

Fully Focused (Service and market focused)

Market Focused

Source: Robert Johnston Achieving Focus in Service Organizations, The Service Industries Journal, Vol. 16, January 1996, pp. 1020

Positioning Distinguishes a Brand from Its Competitors

Four Principles of Positioning Strategy

Must establish position for firm or product in minds of customers Position should be distinctive, providing one simple, consistent message

Position must set firm/product apart from competitors

A company cannot be all things to all people must focus its efforts

Market, Internal, and Competitor Analysis

MARKET ANALYSIS
- Size

- Composition - Location - Trends

Define, Analyze Market Segments Select Target Segments To Serve Articulate Desired Position in Market Select Benefits to Emphasize to Customers

INTERNAL ANALYSIS

- Resources

- Reputation - Constraints - Values

Marketing Action Plan

COMPETITOR ANALYSIS

- Strengths

- Weaknesses - Current Positioning

Analyze Possibilities for Differentiation

Source: Developed from an earlier schematic by Michael R. Pearce

Positioning Maps

Using Positioning Maps to Plot Competitive Strategy

Useful way to represent consumer perceptions of alternative products in visual format Typically confined to two attributes, but 3-D models can be used to portray positions on three attributes simultaneously

Also known as perceptual maps

Positioning of Hotels Price versus Service Level

Expensive

Grand

Regency

PALACE

Shangri-La
High Service Sheraton Atlantic Moderate Service

Italia Castle

Airport Plaza
Less Expensive

Designing and Managing Service Processes

Blueprinting Services

Developing a Blueprint

Identify key activities in creating and delivering service Define big picture before drilling down to obtain a higher level of detail Distinguish between front stage and backstage

Developing a Blueprint

Clarify interactions between customers and staff, and support by backstage activities and systems

Identify potential fail points; take preventive measures; prepare for contingency

Develop standards for execution of each activity times for task completion, maximum wait times, and scripts to guide interactions between employees and customers

Key Components of a Service Blueprint

1. Define standards for front-stage activities 2. Specify physical evidence 3. Identify principal customer actions 4. Line of interaction (customers and front-stage personnel) 5. Front-stage actions by customer-contact personnel 6. Line of visibility (between front stage and backstage) 7. Backstage actions by customer contact personnel 8. Support processes involving other service personnel

Example:

Blueprinting the Restaurant Experience: A Three Act Performance

Act 1: Prologue and Introductory Scenes Act 2: Delivery of Core Product

Act 3: The Drama Concludes

Redesigning Service Processes

Why Redesign?
Revitalizes process that has become outdated Changes in external environment make existing practices obsolete and require redesign of underlying processes

Eliminating non-value-adding steps

Shifting to self-service

Bundling services

The Customer as Co-Producer

Levels of Customer Participation

Customer Participation
Actions

and resources supplied by customers during service production and/or delivery

Includes

mental, physical, and even emotional

inputs

Levels of Customer Participation

Three Levels
LowEmployees
-

and systems do all the work

inputs required to assist

Often involves standardized service

MediumCustomer

provider
-

Provide needed information and instructions Make some personal effort; share physical possessions

HighCustomer
-

works actively with provider to coproduce the service

Service cannot be created without customers active participation

Self-Service Technologies (SSTs)

Ultimate form of customer involvement

Customers undertake specific activities using facilities or systems provided by service supplier e.g. ATMs, self-service gasoline pumps

Many companies and government organizations seek to divert customers from employee contact to Internet-based self-service

Addressing the Challenge of Jaycustomers

Jaycustomer: A customer who behaves in a thoughtless or abusive fashion.

May causing problems for the firm, its employees, and other customers

Six types of jaycustomers:

Thief No intention of payingsets out to steal Rulebreaker The one who breaks the rules Belligerent Expresses resentment, abuses service employees verbally or even physically

Six types of jaycustomers:

Family Feuders Family Feuders: People who get into arguments with other customersoften members of their own family Vandal Service vandalism includes slashing bus seats, breaking hotel furniture Deadbeat Customers who fail to pay (as distinct from thieves who never intended to pay in the first place)